Two weeks in a row now. Freddie Mac's survey released Thursday put the average 30-year fixed mortgage at 6.65%, down from 6.67% the prior week, with the 15-year fixed at 5.95%. Chief economist Sam Khater called it modest relief and reminded borrowers that shopping several lenders can save thousands over the life of a loan. We agree, and for buyers across Sevier County and the rest of Central Utah, a few basis points of relief is worth taking seriously heading into fall.
The Fed's Split Decision
The bigger news came Wednesday, when the Federal Reserve published minutes from its July 28-29 meeting. The committee held the federal funds rate at 3.50% to 3.75%, but the vote was 9-3, with the presidents of the Cleveland, Minneapolis and Dallas Fed banks all pushing for a quarter-point increase. The minutes noted that many participants believed tightening would likely be necessary if inflation did not come down. That is the most hawkish tone we have seen from the Fed in years, and it sets up the September 15-16 meeting as a genuine toss-up.
The minutes also revealed that Chairman Kevin Warsh floated cutting the number of annual Fed meetings from eight to six. That is a structural conversation for another day, but it hints at a chair who wants more time between decisions and fewer surprises. All eyes now turn to Jackson Hole, where Warsh speaks Friday. Markets will be parsing every word for a signal on September.
Builders Pull Back
Tuesday's Census Bureau report showed July housing starts fell 12.4% to a 1.239 million annual pace, 13.5% below a year ago. Permits told a slightly better story, rising 5.0% to 1.443 million, which suggests builders are lining up projects but waiting for clearer rate signals before breaking ground. The same day, NAR reported pending home sales dropped 2.3% in July to an index reading of 71.2, the lowest since January, with declines in all four regions.
Put those two reports together and the picture is a market that has cooled but not cracked. Fewer starts today mean tighter new-construction supply next year, which tends to support prices for existing homes. For sellers in Richfield, Ephraim or Nephi, that is a quiet tailwind.
Oil and the Overseas Wildcard
Energy remains the swing factor for inflation and, by extension, for mortgage rates. The 60-day ceasefire between the United States and Iran lapsed in mid-August without an extension, and Brent crude spiked to nearly $94.40 a barrel on Friday before easing. Tanker traffic through the Strait of Hormuz is still a fraction of pre-war levels. The 10-year Treasury, which mortgage rates track most closely, closed near 4.69% Thursday. If oil stays elevated, the Fed has less room to relax, and that keeps a floor under mortgage rates.
What This Means for Central Utah
We keep hearing the same question from buyers in Salina, Monroe and Manti: should I wait for rates to fall further? Our honest answer is that the Fed is currently debating whether to raise rates, not cut them. This week's 6.65% may look attractive in hindsight. If you find the right home, a rate you can afford today is worth more than a hypothetical rate next spring. Remember that USDA zero-down loans remain available in most of our rural communities, and that Utah's first-time buyer program can provide up to $20,000 toward a newly built home priced under $450,000.
For sellers, the drop in housing starts is a reminder that resale homes in Central Utah face limited competition from new construction. Priced right and presented well, a home here still draws serious buyers, especially those relocating from the Wasatch Front where the median single-family home now costs more than $600,000. Late August is a great time to get photos taken while yards are green and the light is good. If you would like a no-pressure market analysis, our team is just a phone call away.